All Forum Posts by: Bonnie McCullough

I agree with Bret. keeping your investments close is the best way to go, especially at first. With the right 2-4plex you can often live for free or close to it. That also makes sure you choose a desirable area for good people like yourself. If you wouldn't want to live there chances are neither would any desirable tenants. But be careful not to over improve either, if you have expensive taste try to keep in in check, a slightly used $400 refrigerator keeps food just as cold as a $1,500 one. The expensive one might look really nice and have some great features but it isn't a good investment, don't let the market sell you the bells and whistles. 

Decide what you can afford and get real specific about the area you want to invest in. The more you know about the location the better and the more people you know in that area the easier it is to find good tenants. Good luck! 

In Mass you not only need the down payment but you need to have LIQUID assets equaling 6 months of the mortgage, taxes and other expenses on hand. I found this out the hard way when I tried to refinance a property we have owned for 8 years. We have 3 properties none of which are underwater, but good comps are tough to find on each of them. If I had not bought years ago I would not be allowed to own them now. Keep looking for something you can better afford or live in.

Commercial is a tough place to start--unless you are loaded. We have been doing 2 families for 19 years and are now only thinking about the step up. Commercial loans have higher rates, and you will need a credit score near 800 with the 25% or more down payment. Any partnership that 'marries' the score person with the money person must be solid (life long friends or relatives) not just matched business associates. You don't know what you don't know. Tread lightly, Murphy's law is a thing for a reason.

I have read in Massachusetts if you live in the house you do not need to say why you did not choose a particular person to rent to. 

We find that if the rent is higher than the Section 8 cap for your area they can not afford to pay the difference. Also, people who qualify for Section 8 in Massachusetts often can not afford to heat a large apartment and we do not ever include heat. We have had some people look into Section 8 for our place but they simply can not afford our units, even with the aid.

HI, I own a property almost 2 hours away in a different state. We were familiar with the area prior to purchase as it was a favorite vacation spot for us. Long distance investing is a bit like a long distance relationship. IT DOES NOT WORK WELL. Trying to manage from long distance is not only harder, it is stacked against you. The locals often stick together, if you need to hire a plumber, count on the bill being twice as much as it could have been. because you have no idea what they did. And that is if you are able to find good tenants--also much more likely do go badly, or you need to pay a local $200/month to 'manage' it for you.. there goes your profits. My advice, wait until you can afford a local purchase... even a condo. Especially if you are new to the property game! 

Raeshelle, it is not hopeless, you will get there, if they made it easy everyone would be doing it. You have the right attitude, just realize that this business is a LONG HAUL, it is a game of time and strategy. More about thinking than about feeling. Try to take any personal feelings out of the equation--easy to say harder to do. Acting too hastily will cause mistakes that cost time and money. You are still young, do try to enjoy that too, if you find someone else to invest with who you could deal with as a roommate that could help, just be very careful who that might be.

I have rented out the other side of my duplex in Fitchburg for 19 years. It is possible to find good tenants here, but like anything you have to do your homework. Not sure where Charlie got his information about rents, because I have never reported my $1,000 we get in rent for our 2 bedroom to any database that I am aware of. The trick is to have a property that is in good shape and is desirable if you buy the slumloard place those are the people you are left with, if you let someone else manage it for you don't be surprised if they rent to less than desirable people, because yes Fitchburg does have their share of people you do not want to rent to. It can work, the values are less than closer to Boston for a reason, and Gardner is less than Fitchburg for a reason. It is a lower price point to break into the market, but yes there are a lot of multi's here, most are in areas you do not want to be, but not all. You can not rent most of the first people that come along or their problems will become yours. I do not recommend buying a multi in ANY town you are not pretty familiar with or have a friend/partner who can lend that knowledge. And never assume that a local property management company will be that solution for you.

My thought was also that the $100K to gut and rebuild sounds low. What part of Worcester, I am sort of familiar with most sections.

I agree with Dooreuhn, it is usually better to make peace, if they want something fixed say you are working on it but will not if they are not current with the rent. Again too, without knowing the specifics of the situation it is really hard to give advice. 

If they have some bogus claim that they are using to 'get out' of the lease easier/cheaper to let them. At least it is a good time of year to find replacements, it isn't winter.